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Insurer Insolvency

Insurer Insolvency. Property & Casualty Insurance Guaranty Corporation. Albert J. Mezzanotte, Jr. Whiteford, Taylor & Preston L.L.P. Seven Saint Paul Street Baltimore, MD 21202 Telephone: (410) 347-9471 E-mail: amezzanotte@wtplaw.com. Liquidation. Not Impairment Not Rehabilitation

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Insurer Insolvency

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  1. Insurer Insolvency Property & Casualty Insurance Guaranty Corporation Albert J. Mezzanotte, Jr. Whiteford, Taylor & Preston L.L.P. Seven Saint Paul Street Baltimore, MD 21202 Telephone: (410) 347-9471 E-mail: amezzanotte@wtplaw.com

  2. Liquidation Not Impairment Not Rehabilitation Not Run-off Must Be An Order of Liquidation to trigger the involvement of an insurance guaranty fund

  3. Guaranty Funds • State by State • All based on a Model Act • Maryland: Property & Casualty Insurance Guaranty Corporation

  4. Maryland • “PCIGC” • Private, nonprofit, non-stock corporation • Legislatively created and regulated • Not an agency or instrumentality of the State

  5. How does it work ? • Member Insurers • Funded by Assessments to member insurers • No State funds • Insurer contributions limited by a 2% cap

  6. Who does it protect ? • Only Maryland residents who are claimants or policyholders • No subrogation claims • No insurer claims of any kind • Policyholders can’t be sued by solvent insurers

  7. Covered Claims • Defined in sec. 9–301(Insurance Code) • Arise out of a policy of an ”insolvent insurer” • Insurer must have been “authorized to transact business” in Maryland

  8. PCIGC’S Obligations • Deemed the Insurer 9-306(c) • Statutory deductible and cap • Workers’ Compensation paid at full amount • Must exhaust solvent insurance

  9. Practice Pointers • Notice : To PCIGC or to the Receiver • Limitations : On or before the last date fixed for filing claims in the delinquency proceeding

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